The stock market is set to open tomorrow amid hints that President Joe Biden will not seek reelection, a development expected to lead to significant volatility.
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With Biden’s potential withdrawal from the race, economic uncertainty is likely to become a key focus while Democrats work to rally support behind a potential new candidate—Biden has backed Vice President Kamala Harris as a nominee.
Financial experts predict that if Biden formally announces his decision not to run, the immediate market reaction will likely be characterized by unpredictability. Josh Thompson, CEO of Impact Health USA, noted that investors typically favor stability, warning that a major political change could upset the current landscape. This uncertainty may drive investors toward safer assets, such as gold, silver, and the Swiss franc, which tend to be less affected by political and economic turmoil.
Additionally, observers are considering the impact on the so-called “Trump Trade,” which gained momentum following the former president’s strong debate performances against Biden and his recent survival of an assassination attempt. This term describes market behaviors and trading patterns influenced by the prospect of another Trump administration. Stocks in healthcare, banking, cryptocurrency, and oil sectors, as well as firms like Tesla and Trump Media and Technology Group, are viewed as potential beneficiaries of a second Trump term.
Raymond James policy analyst Ed Mills mentioned that if Biden were to withdraw from the race, electoral odds would likely remain unchanged, indicating a 60% chance for Trump against 40% for Biden or a Democratic candidate. Although there may be a temporary stall in the “Trump Trade,” Mills does not foresee a broader market impact at this time.